Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Tuesday, August 4, 2015

Information About Fiduciary Bonds

SavingsIf a person is serving as a fiduciary they may want to consider obtaining a fiduciary bond, many States actually have statutes that require such instruments. Fiduciary bonds are legal instruments that act as insurance for beneficiaries when a trustee fails to perform his or her fiduciary duties. The surety (typically the bonding company or individual acting as surety) will pay the court a specified amount when fiduciary duties are breached. Some State statutes require fiduciary bonds, but even if they don’t people may still want them if there are concerns about the trustworthiness or financial status of the fiduciary.

The amount of bond a person needs to get depends on the amount of assets that the fiduciary is managing. Fiduciaries are generally responsible for acquiring bonds by looking for a bonding company. Most States provide exemptions to corporations, banks, and trust companies under the assumption that such entities have enough assets to pay back the beneficiaries.

See J. Robert Smith, Fiduciary Bonds- Who Needs Them?, The National Law Review, August 3, 2015.

August 4, 2015 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0)

Friday, July 31, 2015

Probate Court Clerk Pleads Guilty To Stealing $232,000

JudgmentIn Savannah Georgia the longtime Chatham County Probate Court Chief Clerk Kim Birge has plead guilty to stealing $232,000 in a scheme. The Clerk confessed to raiding certificate of deposits belonging to other people for her own benefit. The government case alleges that the clerk used U.S. Mail and private commercial carriers as a part of the scheme. Kim Birge apologized to the clerk for her role in the scheme that involved stealing more than $750,000 in a three-year period. “I have asked God for forgiveness and I am asking this court for forgiveness as well.”

See Jan Skutch, Chief clerk pleads guilty to stealing $232,000 from Chatham County Probate Court, Savannah Morning News, July 31, 2015.

July 31, 2015 in Current Affairs, Estate Planning - Generally, Malpractice, Professional Responsibility, Wills | Permalink | Comments (0)

CLE On What You Need to Know Personally and Professionally In Estate Planning

CLE PictureThe American Bar Association is presenting a CLE entitled, Estate Planning: What You Need to Know Personally and Professionally, Wednesday August 5, 2015, 1:00-2:30pm Eastern, online.  Here is why you should attend:

No matter how large or modest the estate, everyone needs a good plan in advance. Unfortunately, we can’t predict accidents, illness, or how long we will live. Good estate planning involves providing critical guidance and peace of mind for your clients. Join our experienced panel as they provide valuable advice on preserving the maximum amount of wealth possible.

Topics will include:

  • The basic nuts-and-bolts of an estate plan
  • Strategies for wealth preservation and gifting
  • Dealing with multiple representation and conflicts issues
  • Managing fiduciary responsibilities

July 31, 2015 in Conferences & CLE, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Thursday, July 30, 2015

Attorney Who Embezzled $115,000 Sentenced To One Day In Jail

JudgmentAn 84 year old Cleveland Attorney who pleaded guilty to stealing $115,000 from a client’s estate has been sentenced to serve one day in jail. Gerald Cooper, who practiced law for 57 years, originally could have faced a 15 to 21 month sentence. The attorney was given a lighter sentence due to his age and health problems. The article indicates that Cooper has colon cancer and is starting to experience signs of dementia. Even though he will only serve a day in jail, this conviction does represent a blemish on Cooper’s record and reputation.

See Eric Heisig, Cleveland attorney who stole $115,000 from client’s estate gets one day in jail, Cleveland, July 29, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

July 30, 2015 in Current Affairs, Estate Planning - Generally, Malpractice, Professional Responsibility | Permalink | Comments (0)

Sunday, July 19, 2015

Caseworker Convicted Of Stealing $125 Thousand From Elderly Couple

JudgmentIn New Jersey, an Atlantic County Adult Protective Services caseworker has been convicted of helping to steal $125 thousand from an elderly couple.  William Price was indicted with five others for allegedly defrauding more than a dozen clients of up to $3.8 million.  The caseworker befriended the elderly couple back in 2006 when working for Adult Protective Services.  He recruited the couple for his co-conspirators who were ran a scheme that defrauded them of $800,000.  Price got $125,000 of the stolen money as part of his cut.  Prosecutors are recommending that Price be given a five year sentence, and he will also have to repay the money that he stole. 

See Andrew Ford, Elder care worker guilty of stealing $125K from seniors, Asbury Park Press, July 17, 2015. 

July 19, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Thursday, July 16, 2015

Malpractice Claims Are Having A Major Impact On Law Firms

Law firmAs law firms constantly try to stay ahead of the changing legal market they can often fall victim to malpractice claims.  The frequency of claims being brought against law firms remain above pre-recession levels.  The highest numbers of claims are in the area of law dealing with trusts and estates practice.  Conflicts of interest are a leading cause of claims; as firms grow and expand and then take on lateral hires potential conflicts can arise.  Law firms should be proactive and try not to ignore or overlook these issues. 

See Ames & Gough, Law Firms Face Large Malpractice Claims as Risks Grow: Study, Insurance Journal, July 10, 2015. 

July 16, 2015 in Malpractice, Professional Responsibility | Permalink | Comments (1)

Monday, June 29, 2015

6 Tips Family Trustees Should Follow

CalculationPeople should think twice before getting involved with serving as a trustee for friends or family.  The role of trustee can be a thankless position that carries with it many fiduciary responsibilities and risk of personal liability.  If a person is thinking about being a family trustee they should understand these six tips:

    1. Consider seeking professional help with trust management. If a trustee lacks the expertise needed to perform certain trust functions they may be able to use trust assets to pay for professional assistance.
    2. Impartiality is a must.  A trustee has a fiduciary responsibility to put the welfare of the beneficiaries first and to be impartial. 
    3. Be careful about investing. A trustee must be reasonably prudent when investing and has a legal obligation to invest in a diversified portfolio.  There may be an exception when family wealth is concentrated in a particular piece of property.
    4. Personal liability is a risk.  A trustee could be at risk of being sued, they should use caution and document all decisions.
    5. The experience will probably not be pleasant.  The role of trustee can be a stressful thankless responsibility that involves a lot of work. 
    6. Make sure there is a way out. If the pressures of being trustee become too much to bear there should be a mechanism in place for resigning. 

See Deborah L. Jacobs, 6 Tips for Family Trustees, Morningstar, June 28, 2015. 

June 29, 2015 in Estate Planning - Generally, Professional Responsibility, Trusts | Permalink | Comments (0)

Friday, June 26, 2015

How Financial Advisors Can Avoid Making Mistakes

Financial advisorFinancial advisors have an important task of advising clients on making smart investment decisions, sometimes though these financial advisers can make serious mistakes.  This column discusses some of the ways advisers can avoid or minimize some of the more common mistakes.  Firms should adopt a standardized and comprehensive process for reviewing a client’s information.  It is extremely important to keep up with the latest technology and to have a way to organize a client’s information in both a digital and paper format.  Financial advisors should also provide clients with a checklist to make sure all the necessary documents are in order. 

See Glenn G. Kautt, Advisors Mess Up Too: How To Prevent Planning Errors, Financial Planning, June 25, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

June 26, 2015 in Estate Administration, Professional Responsibility | Permalink | Comments (0)

Tuesday, June 16, 2015

Disbarred New York Attorney Charged With Grand Larceny And Practicing Law Without A License

JusticeA New York man who was disbarred about five years ago has been charged with stealing more than $34,000 from a client couple.  The State alleges that John Giordanella misrepresented himself to the couple by making them believe that he was still a practicing attorney.  The couple, believing that he was a licensed attorney, hired Mr. Girdanella to handle estate matters and gave him six checks totaling $34,247.  If convicted, Mr. Giordanella could face up to seven years in prison. 

See Disbarred attorney charged with stealing $34,000 in funds, Queens Chronicle, April 23, 2015.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

June 16, 2015 in Current Affairs, Estate Planning - Generally, Malpractice, Professional Responsibility | Permalink | Comments (0)

Tuesday, June 2, 2015

Malpractice & Ethics Article Available on SSRN

MalpracticeI recently posted on SSRN my article entitled Avoid Being a Defendant: Estate Planning Malpractice and Ethical Concerns, 5 St. Mary's L.J. Mal. & Ethics 224 (2015).

Here is the abstract of the article:

An estate planner may become a defendant in a case involving an estate he or she planned in two main ways. First, the attorney may have performed his or her services in a negligent manner potentially creating exposure to malpractice liability. Second, the attorney’s conduct may have lapsed below ethically acceptable standards.

This Article reviews the exposure an estate planner may have to malpractice liability with emphasis on Texas law and then focuses the reader’s attention on ethical issues that may arise while preparing or executing the plan. The author hopes that by pointing out potentially troublesome areas, the reader will avoid the ramifications of drafting a flawed estate plan or having a lapse of ethical good judgment which may lead to the frustration of the client’s intent, financial loss to the client or the beneficiaries, personal embarrassment, and possible disciplinary action.

June 2, 2015 in Articles, Malpractice, Professional Responsibility | Permalink | Comments (0)